Policy, politics & public opinion: What does it take to craft and pass a successful water bond?

With the grim reaper of legislation sure to be visiting the $11.14 billion water bond early in 2014 to officially banish the bond to the junk pile of failed legislation, both the Assembly and Senate are hard at work crafting its successor. However, the current water bond has been hotly contested, and there’s no guarantee that any new bond will fare any better, even if it is smaller and leaner.

The annual Southern California Water Committee dinner, held on October 24, included a panel discussion on what it takes to gain voter approval for a water bond. Seated on the panel was Assemblyman Anthony Rendon, Chair of the Assembly Water, Parks, and Wildlife Committee and also Chair of the Assembly Water Bond Working Group; Ellen Hanak, senior fellow at the Public Policy Institute of California (PPIC); and capitol insider and initiative guru Joe Caves, who has led eight statewide ballot measures since 2000 including three successful water bonds. The panel was moderated by Charles Wilson, chairman of the Southern California Water Committee.

The discussion began with each panelist being given 5 minutes.

ASSEMBLYMEMBER ANTHONY RENDON, CHAIR OF THE ASSEMBLY WATER, PARKS, AND WILDLIFE COMMITTEE & CHAIR OF THE WATER BOND WORKING GROUP

Assemblyman Anthony Rendon began by saying that the state has reached a point where talking about a water crisis seems almost redundant. “This state seems to have been born in a water crisis and seems to have sort of existed in water crisis, and has flourished in a water crisis throughout its existence in statehood. We have done so through the creativity and ingenuity of so many folks and also as a result of some of our incredible natural resources that we have. We’ve also done so through the benefit of the federal government, a federal government that has, for quite a while, been dedicated to funding large infrastructural projects,” he said, noting that the federal government does not have the resources to fund large infrastructure projects anymore.

Photo courtesy of the Southern California Water Committee

“It seems as though now, more than ever, is the time to rethink the way we think about water, and reshape our water consciousness, particularly in Southern California,” he said. “When we do think about moving forward in this century, we need to start thinking about regional water solutions.” He called out the water recycling efforts of Orange County and the groundwater cleanup efforts in the San Fernando Valley as the types of regional projects we need to be looking at.”

It does not mean that Southern California should ‘divorce’ ourselves from thinking about water statewide. “It does not mean that we stop thinking about the Colorado River or the Delta as a place from which to draw water, but it means that we now think of our regional solutions in concert with those statewide solutions,” he said, noting that the Assembly water bond has been developed in the context of declining water resources and is focused on regional solutions.

When the water bond was developed four years ago, it began as a $6 to $8 billion bond which suddenly grew to $11.14 billion in the last weeks of negotiations due to earmarks, said Mr. Rendon. It has been pulled off the ballot twice over concerns it would not win voter approval. PPIC poll results have shown that the sweet spot is around $5 to $7 billion for a bond, so the $11.14 billion was certainly out of that range, he pointed out.

When the Assembly began working on the water bond in the spring of this year, they created a working water group comprised of 8 members from throughout the state. Joining him on the water working group were Southern California Assemblymembers Mike Gatto, Raul Bocanegra, and Tony Atkins. “We decided the best way to start the effort was to blow up the bond and start from scratch,” said Mr. Rendon, noting that the working group began by developing a number of water bond principles. One of those is accountability. “We wanted to make sure that there was a tremendous amount of accountability and that accountability measures were woven throughout the bond. It is absolutely essential for the development and passage of future bonds and very important to me because I represent a district, the 63rd Assembly District that has 8 cities, four of which have former councilmembers in prison. Accountability measures run through every piece of legislation that comes out of my office.” The other key principle was to assure there were no earmarks, he added.

After a public hearing, the working group developed five categories for funding: safe and clean drinking water, protecting rivers, regional climate change response, Sacramento-San Joaquin Delta, and storage. He said that each of those categories were allocated approximately $1.5 billion, except for safe and clean drinking water which was allocated at $1 billion, so the bond now stands at $6.5 billion.

The Committee has already held several public hearings on the bond, and the hearings will continue as the Committee will take to the road to hold public meetings in the Salton Sea area, Redding, Santa Cruz, and Sacramento before the end of the year. “When the legislative year starts again in January or February, we’re going to redouble our efforts and try and get something on the bond next year in 2014,” he said, noting that other legislators as well as the Governor have all said getting a water bond passed next year is a priority.

Assemblyman Rendon encouraged everyone to continue to provide input and weigh in on the bond. “I think it’s safe to say that I think we all know that the water needs of this state are profound. A $6.5 billion to $8 billion won’t cover all that we need to do related to water in this state,” he said. “It’s important that we pass this water bond and it’s important that we show the voters that this bond is accountable and that the dollars go to those allocations that they are intended to go towards. We want to make sure that this is a successful water bond, not only in terms of being drafted, not only in terms of getting on the ballot, not only in terms of passage at the polls, but also the programs that are implemented through the bond.”

ELLEN HANAK, SENIOR FELLOW AT THE PUBLIC POLICY INSTITUTE OF CALIFORNIA

Moderator Charles Wilson then turned to Ellen Hanak and asked her where the voters were at in this – what are some of the challenges and opportunities?

“First, I have to start with a couple of disclaimers,” began Ellen Hanak. “One of them is that both of these guys know how to actually get voters to vote for something. I observe things from an armchair or from my office, so anything I say about what’s going to make this successful, you have to take with a grain of salt. The other disclaimer is that I’m actually not a pollster but an economist, and economics is rightfully known as the dismal science. That means that I like to give people bad news, and that’s what I’m going to do for you right now. If you don’t like what I’m going to say, just remember the grain of salt part and we’ll be fine.”

The PPIC has done polling on this issue, Ms. Hanak said, noting that she agrees with Assemblymember Rendon that chances of passage looks better with a smaller bond. “But what our polls have shown is that even though the economy has been getting better, and even though the bond is getting smaller, it’s not looking great. It’s looking maybe a little better, so just to give you a few numbers.”

Ms. Hanak then ran down some poll results. “In March 2012, we asked people, if the election were held today, how would you vote on a $11 billion bond, after giving them a little information about the good things it would do, and 51% of likely voters said yes – that’s not a real big margin of safety there,” she said. “In March 2013, we asked the same question, with the same bond, if the election were held today, only 42% said yes, and this is in much better economic conditions and much better state budget conditions.”

“Also in that survey in March 2013, we also asked what if it were smaller without saying how much smaller, and the percentage increased to 55%,” she said. “And in September 2013, the question was, if it were a $6.5 billion bond, doing all these good things, and if the election were held today, how would you vote. Out of likely voters, 50% said yes, which is definitely better than 42% but it still means it’s a heavy lift.”

Ms. Hanak said another poll was conducted by USC and the LA Times, which asked a number of water questions. One of the questions was, without giving a dollar amount, would they support a water bond that would do things like groundwater cleanup, levees, and habitat, and 60% said yes. They then asked if they would still support the bond if it meant the state had to borrow $5 or $6 billion in order to do that, and the favoring went down to 36%. “Now the LA Times writer, Bettina Boxall, she interpreted that as voters want the stuff; they just aren’t willing to pay for it,” said Ms. Hanak. “I look at that particular series of questions and I think that voters don’t necessarily know that bonds mean borrowing money. If you get to an election where there are people who don’t like what’s on the bond and they remind voters that this means borrowing money, it’s not good.”

“So that’s my bad news,” said Ms. Hanak. “Now I have one piece of good news for you. The meteorologists are predicting that we might be facing a really serious drought for the second year in a row. Good news, right? Not if you’re a water manager this coming year or if you’re a farmer dealing with shortages and so on, but from a water bond perspective, in November 2014, that might be just the thing.”

JOE CAVES, CAPITOL INSIDER AND CAMPAIGN MANAGER

Moderator Charles Wilson then turned to Joe Caves. “Joe, you’re the guru. Is it enough anymore to slap ‘clean water’ on an initiative title and say go for it?”

Photo courtesy of the Southern California Water Committee

“I don’t think it’s ever been enough, but I want to agree with something Ellen just said,” began Joe Caves. “One of the things we find is that the two most important factors for voters deciding when they are going to vote for a bond are one, do they have some level of confidence in state government, and two, is it raining or not. Literally, the weather and what their sense is of the current conditions of water has a huge effect. We could be in drought conditions but if there’s just been two weeks of rain, your support for a water bond goes down. If you had a fairly extended period of no rain, people have this perception that we have a water issue and maybe we need to deal with it.”

The legislature doesn’t have a very good record of passing successful water bonds, said Mr. Caves. “The one passed in 2009 was the first one they even managed to get a 2/3rds vote on since 2000. And that one was constructed in a way necessary to put legislative compromises together, but also created elements of it that created opposition to the bond,” he said. “The polling that we did after that bond passed was such that it started out with so much baggage, it was so large, and the opposition was so significant that all of our polling showed it going down in 2010. It showed the same thing in 2012, and it’s showing today that the bond that’s on the 2014 ballot would go down pretty dramatically.”

Breaking down the factors for success or failure of a water bond, it comes down to this, said Mr. Caves: “One is how much confidence to voters have in state government and the state budget. That was at a historic low a couple of years ago. It’s on the rise now and we’re seeing actually fairly significant improvement. In fact, for the first time, our polls show that we crossed the 50% mark on water bonds where voters say it’s an important enough issue that the state ought to borrow money to solve the problem.”

The second big issue driving voter attitudes is if it solves an issue that they perceive as important. “The challenge there is that everybody’s issues are different; the issues in Southern California are really different than the issues in the Bay Area,” he said. “The voters perception of what are important water issues are so dramatically different by region and by where you sit and the issues that water managers may regard as the most important are not at all the issues that voters tend to think are the most important. That’s one of the reasons why we’ve always ended up defaulting to drinking water, clean water, because voters are much more interested in water quality issues, both the quality of the drinking water and the quality of rivers, lakes, and streams.”

“In all of our polling, that’s been the driving issue,” continued Mr. Caves. “Water managers in California do such a good job in an area of scarcity that voters have almost no fear they are going to run out of water. They turn on the tap, the water comes out, everything’s fine. They’re not so sure about water quality, though. There are stories about pollution and their concerns about those issues are great enough, that’s the one area that we find that voters across the board think that there’s an issue that maybe needs to be addressed.”

The challenge is constructing a water bond that addresses the diversity of issues. “Quite frankly, clean beaches is a bigger issue in LA than cleaning up groundwater,” he said. “Certainly, stormwater is a big issue down here in Southern California and it’s one that needs to be addressed, but in terms of water supply, groundwater cleanup is a much bigger issue. But it’s an issue that people don’t understand at all. It’s that mismatch between the issues that the water community need to be addressed and the investments that need to be made and the things voters think are important. So trying to construct a bond that marries the two but also is written in a way that’s sensitive to voter needs and allows you region by region to address voter’s concerns is really critical.”

The third issue driving success or failure always is if there is opposition to a bond, said Mr. Caves. “Key in constructing a bond is to make sure that every region of the state gets something from it and feels like it addresses some of their needs, and it doesn’t create opposition anywhere,” he said. “It doesn’t do anything that hurts any major constituency that would attack it. That no opposition aspect is critical.”

Mr. Caves said the polls he was looking at looked a bit better than the PPIC’s numbers. “It shows that a bond similar to Assemblyman Rendon’s could end up with about 55% to start,” said Mr. Caves. “A strong support campaign will push you up in the 60s, but almost any kind of opposition campaign put you down in the low 40s. That volatility is something that is greater than any time in the last 10 years, but it indicates the fragility of support that is really critical. It means you can’t have opposition. You can’t have anyone who is in a position who believes that passing this water bond is fundamentally going to hurt their interests and so they’re going to organize against it and be a credible voice against it.”

The coalition that must be built to pass a bond starts from the left and moves hopefully past the middle, said Mr. Caves. “The framing of all water bond issues and all bond issues are fiscal, and taxpayers are reluctant to pass them. It tends to be voters on the left are more willing to vote for them, and voters on the right are much less willing, so even voters on the right who may have issues in the bond, they fundamentally support what they care about ideologically and are much less likely to support the bond, so you have to build your coalition from the left across to the middle. That is a limiting factor in terms of what constituencies you can alienate.”

Opposition to the bond is really driven on two factors, Mr. Caves said. “One is on the Delta – resolving the Delta issues are obviously critical, particularly to Southern California, but the Delta opposition to the current BDCP is great enough in the Delta communities that particularly in the Bay Area and Northern California, it tends to translate into this north-south water grab issue that fundamentally doomed the peripheral canal back in 1982. All of our polling indicates that if that’s the message that Northern California has and if there are credible messengers pushing that, it’s very easy to defeat a bond, any bond.”

The second issue that needs to be resolved is the split between the agriculture community and the environmental community on water storage. “It’s been the scorched earth issue in every water bond I’ve worked on; it’s the struggle in the legislature, and it’s the main reason the legislature has a hard time getting to a two-thirds vote. … If we can’t figure out a solution now, I think we’ll run the very real risk that we can’t pass a bond on this,” he said. “The only way you’re going to pass a bond in the current fiscal conditions is if you can really create a consensus that has every major group – the water community, agriculture, environmental community, labor, business, all saying yes we need this, this is a good idea. That’s a big threshold to get over.”

DISCUSSION

Moderator Charles Wilson then asked the panel how you can get 2/3rds of the legislature to come together in a coalition on the policy aspect, and then have that translate into generalized support amongst the public.

“It’s not going to be easy,” answered Assemblyman Rendon. “I think we all know that. It’s going to be a heavy lift. First of all, it does need to be a well balanced bond. It needs to be a bond that’s well balanced in terms of geography, it has to be a water bond that’s well balanced in terms of the interests represented. … Another thing is to remember that there ought to be two different campaigns. There has to be the campaign to get the bond through the legislature and the campaign to get the bond approved by voters, and those are very different campaigns, and the way you approach those are very different.”

The PPIC did another poll about climate change recently which showed that a large majority of California voters think something needs to be done to address climate change, said Mr. Rendon, and the working title of the Assembly bond frames the bond within the context of climate change. “When you think about a place like Orange County which is generally not thought of as the most politically progressive, 59% of folks in Orange County think something has to be done right away to address climate change. That’s in Orange County. The debate about climate change is pretty close to almost being retired to the history books. So I think you talk about the bond within the context, not only in clean water, available water, and safe water, but also in the context of climate change. And you also invest upon the context of the drought we discussed. 78% of Californians are concerned about droughts.”

Moderator Charles Wilson asked Ellen Hanak what the voter’s mood was towards the state. The state may be getting better but do we trust them with our money … ?

“There’s good news and bad news on the polling,” said Ms. Hanak. “We’ve seen things a lot worse. In September, legislative approval numbers were at 38%, up ten points from last October. So that’s good, right? Governor Brown, 48%, also up. He didn’t go quite as low as the legislature. Trust in state government. When asked last May it was 32%; back in October 2010, 18%. Is that enough to feel good about government? I don’t know.”

“What is clear is that the economic kinds of concerns about the budget and about whether you feel like Sacramento is spending your money wisely, those are really not looking very good,” Ms. Hanak continued. “Even though the budget has improved a lot and people did vote from Prop 30 and so on, 58% in September were still saying that the budget was a big problem, and about a third said it was somewhat of a problem. Waste – over half say a lot of waste still in Sacramento.”

“Another question we ask periodically is whether they think Sacramento is run by big interests, special interests, or for the benefit of everybody, and over 60% feel like its big interests,” said Ms. Hanak. “So in that context, we’re suggesting you really need transparency in whatever bond that you’re proposing. … Whether or not people feel comfortable about borrowing is still a big thing. For families, the economy is tight and the state budget cuts that we experienced are still in people’s minds.”

Moderator Charles Wilson turned to Joe Caves and asked who is it that comes out in opposition to water bonds – what is the voice and the funding source … ?

“In any legislative negotiation, there will be interests who didn’t get everything they wanted, and they will be threatening to oppose it at the ballot,” replied Mr. Caves. “They will be trying to oppose it at the legislature and they’ll be resisting. That’s not the same as having a reason to mount an opposition campaign. There is an important threshold we have to draw. The question is, does passage of the bond hurt their interests? If it’s crafted correctly so that every region of the state benefits to some extent, every major water investment priority is addressed to some extent, and you’re careful not to do anything that actually damages an interest, they may not like it because they didn’t get everything they wanted, but that doesn’t mean they are going to mount a campaign against it, or have the resources to.”

“It’s very challenging to put up an opposition campaign; you have to have a strong reason to do so,” Mr. Caves continued. “We always see the taxpayer groups opposing bonds. They do it every time. That gets into the issue about how you build your constituency from left to right. Their credibility is strongest on the right, so their opposition has the least impact. They are not pulling away people who were likely to vote for it anyway. It’s if you have groups that are on the left or in the middle who have credibility with voters who would be inclined to vote for it if all other circumstances were good, that’s where your danger lies.”

AUDIENCE QUESTIONS

The moderator then asked if the BDCP was good or bad for the bond, and how will that change if the BDCP is approved later in the year?

“I think that is one of the two big issues that determine viability,” responded Mr. Caves. “Right now, Southern California has the most to gain or lose by approval of BDCP but has no idea what it is and it has no resonance at all with voters. In Northern California, it is dinner table conversation. If you throw a dinner party in Northern California, somebody will say, oh it’s the twin tunnels, the south is just stealing our water. … There is a danger that the state splits regionally if that’s the characterization of the bond.”

“There’s a delicate path you have to walk to include investments in the Delta that make the investments we need, particularly in Delta ecosystem and levees, that are needed in order to keep the current system going, and that are needed in order to improve the condition of the native species there – Investments that are important if BDCP is approved or if it’s not approved,” said Mr. Caves. “The bond must also be BDCP-neutral – that it does not affect the outcome of BDCP to the level that passage of the bond is not viewed by the Delta communities or by people in Northern California as facilitating BDCP.”

The moderator then asked Assemblyman Rendon how far apart we were. What are the major hurdles and how big is that gap?

“The draft that we have was not taken to the floor for a vote, and the draft that the Senate has was not taken to the floor for a vote,” said Mr. Rendon, noting that the water working group workshops have been very productive. “It is a political process. I am sure that when we get back in January that there’s a potential of the bond getting caught up in other political concerns. And in an election year, it’s another layer of concerns as well. So we’re moving along exceptionally well as a water working group, and we’re moving along as a water working group that represents the various parts of the state and various constituencies in the state but again, it is a heavy lift. It requires input from folks in this room to contact your legislators and let them know this is important to you.”

“Just in population, Southern California is the dominant population center,” said moderator Charles Wilson. “Ideally if everybody in Southern California says, ok that’s good for us, you ought to be able to pass it. … it really comes done to the question of how you communicate, how do you advocate?”

“I think we do it through a coalition that is big and complex,” said Assemblyman Rendon. “This is a group of people that represents a diversity of interests and diversity of geographies and different types of interests. I think you do it through organizations such as this and through you reaching out to your own folks in your communities.”

Ellen Hanak replied, speaking as a voter, “What I would want to see is if I’m going to be voting to borrow money and pay it back with my taxes, is it stuff that really merits that, versus things that we could pay for in some other way, or do in some way more cheaply,” she said. “It’s partly accountability but it’s also explaining to people why there is really a need.”

“Any of these bonds are small, compared to what we spend on water in California,” continued Ms. Hanak. “The water sector is spending annually $32-$34 billion a year and we’re spending about $1 billion from bond money on that. Most of the money is local, raised locally, spent locally, by ratepayers, by property owners, but there are some real gaps. … the healthy rivers, people care about that but not in a way they are going to vote 2/3rds majority at the local level to pay for it. The ecosystem stuff, same thing.”

“The safe drinking water is a social justice issue that I think you can get Californians behind,” she said. “Making it clear that it’s about that kind of stuff and maybe not so much about stuff where agencies are getting grants for projects they would have done anyway. Frankly, some of those bonds have gone to those kinds of things which have helped make it cheaper for ratepayers but were not necessary.”

“We always say that in a campaign, you can’t convince voters there’s a problem and then sell them on the solution. If you have to do both, you’ve already lost,” said Joe Caves. “If they don’t think it’s a problem, you’re not going to win. They have to already perceive that there’s some problem to which this bond is the solution.”

“You’ve got two phases here,” Mr. Caves continued. “Phase 1 is will we ever get to a campaign? The extent to which organizations like this and water districts can communicate with their constituents with what their water needs are, what that community needs, what are the things that are not being funded, and what are the things that a water bond can do that really help them? That creates the atmosphere where a campaign is possible.”

“That’s very challenging … you live in a dry area, you live in a desert, so you’re much more sensitive to it. The water conservation and water use efficiency is much more advanced down here. It’s the irony of the state that the north has the perception that the south is wasting the water when in fact the south is much more efficient and the north is where most of the water waste is. So the issues you have to deal with in the campaign have to be highly focused on the things that people already perceive are a problem. What you can do before hand and what organizations like the members of the committee are to try and communicate what those problems are and sort of lay that foundation for a campaign.”

The moderator then asked the panelists one last question. What is the one failed flaw and the one thing that absolutely has to be?

“Any sort of significant funded opposition kills the bond,” said Assemblymember Rendon. “What has to be in there, one thing … can I pick 5? Safe and clean drinking water.”

“I’m going to say safe and clean drinking water’s got to in there,” said Ms. Hanak, “and anything that smells like BDCP cannot be in there.”

“I agree on both of these fronts,” said Mr. Caves. “I would put the caveat to that – it has to be structured in a way so that each region feels like their issue is taken care of, because fundamentally this is a state of regions, and everyone has a very different perception about what their water needs are.”

One comment

It seems to me that a huge problem with any water bond proposal will continue to be that the State has no coherent consensus-based end-to-end plan for the state’s water future. Until such a plan exists water bonds will continue to be nothing more than influence-based pork barrel distributions of the state’s good faith and credit looking for a critical mass of the electorate. Maybe failures of recent water bond proposals aren’t real failures after all. Maybe those failures are what are needed to penetrate the legislative skulls that seem to focus only their next electoral fund raising event.